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German inflation remains low in August

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Inflation in Germany, Europe's biggest economy, stood at just 0.2 per cent in August, data showed on Friday, amid concerns that prices could begin to fall again in the 19-country eurozone.

[FRANKFURT] Inflation in Germany, Europe's biggest economy, stood at just 0.2 per cent in August, data showed on Friday, amid concerns that prices could begin to fall again in the 19-country eurozone.

Using the Harmonised Index of Consumer Prices (HICP) - the yardstick used by the European Central Bank - inflation in Germany was even lower at just 0.1 per cent year-on-year in August, the federal statistics office Destatis calculated.

Falling energy prices were the main factor behind the stubbornly low rates, the statisticians said in a statement.

The ECB regards annual inflation rates of close to but just under 2.0 per cent as conducive to healthy economic growth and has recently launched a raft of measures to kickstart prices and push area-wide inflation back up nearer that level.

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A controversial programme of sovereign bond purchases, known as QE or quantitative easing, was rolled out in March and initially appeared to work.

But the economic slowdown in China and depressed oil prices have pushed inflation expectations back down again.

The German August inflation data on Friday confirmed a preliminary estimate released at the end of last month.

AFP

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